False Claims Act

The Hill had an article on the False Claims Act. The FCA authorizes private individuals to sue anyone they think is defrauding the federal government. Individuals filed more than 4,700 FCA actions between 2009 and June 2016. The Act provides for treble damages. The spoils are divided among the person alleging the fraud, his attorneys, and the federal government. In 2014, the Department of Justice reported that FCA “recoveries” totaled $5.79 billion. Health care lawsuits accounted for $2.3 billion of that.

The federal government must investigate the claims in every FCA case. The initial investigation is done under seal. Defendants may be investigated for years, but not know about it until their business documents are subpoenaed. The individual alleging fraud can proceed with a case even if the government decides against it.

Increasingly sophisticated groups of attorneys choose to continue. They sue any entity that receives federal payments, claiming that the failure to comply with administrative standards constitutes fraud. At the time the act was passed, the goal was to prosecute fraud cases in which a contractor billed the United States for nonexistent or worthless goods or services.